SoftBank buys into Line’s mobile service in Japan

SoftBank is partnering up with messaging app Line to help develop its Line Mobile telecom service.

Line announced that it has agreed to allow SoftBank to take a 51 percent in the business via an issuance of new shares. The deal is expected to close by March.

From the documents, its mobile business is valued at around $15 million (1.7 billion JPY) but a company spokesperson told TechCrunch that discussions remain ongoing around the valuation for SoftBank’s investment — in other words: it could be higher. The firm will, however, take a 51 percent stake, the spokesperson confirmed.

It’s certainly an odd relationship given that SoftBank is first and foremost a telecom company itself. This alliance may be a case of the company hedging its bets with a younger, more trendy brand. The market for MVNOs has boomed in Japan after the government relaxed regulations around handsets in early 2017. Rakuten’s MVNO claims to be Japan’s top MVNO with 1.4 million customers. Line does not reveal figures for its service.

Line Mobile’s premise in Japan is simplicity. The service claims to be easy to use, and it allows unlimited data for Line services and prominent social media sites like Facebook, Twitter and Instagram. Line also launched a mobile service in Thailand, one of its major markets, through a partnership with Telenor’s DTAC operator unit.

The company, which is listed on the Tokyo Stock Exchange and on the New York Stock Exchange, said it made a profit of 8.078 billion JPY (approximately $75 million) on total revenue of 167.147 billion JPY, $1.5 billion, in 2017. Those figures are up 19.4 percent and 18.8 percent, respectively.

Line said the number of monthly active users in Japan, Indonesia, Taiwan and Thailand — its four largest markets — stands at 167.5 million combined. That’s up just one million year-on-year and down slightly on 168 million in the quarter previous. The company doesn’t provide a figure for all users worldwide.